MAJOR ALTCOINS THAT WILL GO TO ZERO🚨 (Founder of Web3 Gaming Explains)
🎯 Summary
Podcast Episode Summary: MAJOR ALTCOINS THAT WILL GO TO ZERO🚨 (Founder of Web3 Gaming Explains)
This 64-minute episode features an in-depth discussion with Timothy Tello, CEO of Ethics and self-proclaimed “grandfather of Web3 gaming,” focusing on the failures of current Web3 gaming models and the necessary evolution toward seamless, integrated gaming economies.
1. Focus Area
The discussion centers on the Web3 Gaming Industry, specifically critiquing current speculative models (NFT gatekeeping, volatile tokens) and outlining a path toward successful, scalable gaming that integrates blockchain technology subtly. Secondary themes include digital identity, cybersecurity, and the economic structure of the broader gaming industry (mobile vs. AAA).
2. Key Technical Insights
- The Two-Token Model for Stability: Successful Web3 gaming requires separating the volatile, speculative external token (for secondary markets/cashing out) from the stable, in-game currency (like V-Bucks) which maintains a fixed value. This prevents player frustration when in-game asset values fluctuate.
- Blockchain for Revenue Waterfall Auditing: The core technical innovation Tello patented involves using blockchain to create transparent, auditable smart contracts for revenue sharing among developers, artists, and operators within a shared game ecosystem, solving a problem that plagued early attempts like MapleStory.
- Custodial Wallets are Necessary for Mass Adoption: Publishers will not adopt non-custodial wallets due to control and cost. The successful model must utilize custodial wallets that abstract away the complexity of blockchain interaction for the average gamer.
3. Market/Investment Angle
- Web3 Gaming (As Currently Known) is Dead: The speculative, NFT-gated version of Web3 gaming has failed. Success lies in integrating blockchain features so deeply that the “Web3” label disappears, becoming simply “gaming.”
- Focus on Economies of Scale (The Roblox Model): The future is not competing with $200M+ AAA titles but replicating the success of platforms like Roblox, which achieved massive LTV ($300 vs. $3 average) and retention through a single, universally accepted token/currency across thousands of experiences.
- Mobile Dominance: The focus should be on the mobile market (77% of volume/revenue) rather than trying to launch the next PC blockbuster, as mobile offers lower barriers to entry for new, community-driven models.
4. Notable Companies/People
- Timothy Tello: The guest, holding the patent for obligatory video games utilizing blockchain, arguing for a community-centric approach over self-interest.
- Axie Infinity & Gala Games: Cited as examples of failed models—essentially “staking protocols with an animation” rather than true games.
- Roblox: Held up as the gold standard for achieving massive economies of scale and player retention through a unified economic structure.
- Epic Games/Unreal Engine: Mentioned in context of early free-to-play adoption skepticism and the development of Fortnite (originally “Gunslingers”).
- Activision/Rockstar: Acknowledged as the giants whose massive development costs (e.g., GTA 6) make them resistant to disruption unless they adopt auditability/tokenization for internal economy control.
5. Regulatory/Policy Discussion
The discussion touched upon the restrictive nature of Apple and Google’s App Store policies (30% processing fees and privacy changes) which have hampered monetization, leading to job losses in the industry. Tello’s patented model was specifically designed to gain SEC approval by ensuring clear revenue waterfall auditing, suggesting a path for regulatory compliance.
6. Future Implications
The industry is moving toward consolidation and interoperability, mirroring historical economic shifts like the adoption of credit cards or the Euro. Successful gaming ecosystems will function like unified gift card systems (Roblox/EA Sports), where a single token grants access and value across multiple titles, drastically improving player retention and LTV. The next wave of disruption will likely come from developer co-ops (e.g., in Southeast Asia) using shared tokens to compete against monolithic publishers.
7. Target Audience
This episode is highly valuable for Web3/Crypto Investors, Game Developers, Gaming Industry Executives, and Blockchain Architects seeking a pragmatic, non-speculative roadmap for integrating blockchain technology into mainstream gaming.
🏢 Companies Mentioned
💬 Key Insights
"It's going to be a video game. Video games have the highest peak that, you know, they can easily hit a billion dollars. And now the mobile market's open, and the blockchain market's open, and it's going to happen. And it's going to be through blockchain."
"It won't be a company. It'll be a game."
"Without some centralization, Janty, there can't be decentralization."
"And so he came back. He's like, 'I have this idea.' And that idea was Matic. And he was like, 'I think we could fork Ethereum.' So we created the first fork, and we could reduce certain pieces of this to create scalability. And so that was the first Layer 2."
"I hired Janty. My other co-founder hired Janty, and then we bring him in. We're arguing about like 99 cent gas fees. And if a token's a dollar, right, we can't have a transaction fee that's a dollar. It's double the price of Apple already."
"And a year later after Epic kept going with it, that judge was like, you can't do that. You have to let them in and you cannot charge a commission. So now free, free, we can bring any Web3 games. I think that's why we didn't see a lot of mobile Web3 because you couldn't build an economy that has got into the business."